Datawrap, in Auckland, is a year-old entirely virtual company, which has just started making sales on the Internet of its time-recording and accounting software and a series of Microsoft Word templates for special purposes.
Despite several perceived difficulties, and, what it describes as, initially unsatisfactory service from its ISP and the BNZ Bank, its credit card processor, Datawrap will stay with its 100% online selling channel.
"We're an entirely virtual company," says director Marcel van Kempen, and that saves cost. "The Internet allows you to run that sort of operation. We don't employ sales staff on the road, and we don't need people packing CDs into boxes for us."
The advantage of direct download for the customer is that it enables the user to do the full transaction - payment and delivery - in one session, he says. Against that, there is no opportunity to develop a long-lasting customer relationship, with the potential of future sales.
"Customers come to your site once and then they're gone. And if they don't get satisfactory performance on a credit card sale and download, then they'll go to another site offering a similar product and probably not come back to yours."
This is why it's crucial to be "on the ball" 24 hours a day, seven days a week, and not to have difficulties wished on you by non-performing partner.
The problems with the ISP and the bank now seem to be solved, he says, but it points out one drawback to Internet sales - there are other parties in the commercial equation; the company doesn't have complete control of its business.
"Yes, we take it we have lost sales," he says, especially during the initial period of difficulty. Also, doubtless, sales have been lost, and will continue to be lost, because the customer dislikes the selling medium.
"But we're not chasing every possible sale or even nearly every sale," van Kempen says. The company's plan is not based on that premise.
Another disadvantage of download delivery, he says, is the customer doesn't get a manual, or even a sheet of instructions on how to start up the product. Both could be included electronically as files zipped in with the product itself, he acknowledges, but that would commit the customer to the chore of printing them out.
But the cost advantages of direct Net sales still outweigh the disadvantages, he says.
Datawrap's products include a time-management system, software for simple small-business accounting, and the set of Word templates, which allow you to write book texts and scripts for plays, film and television in a way recognised as standard for those particular markets.
Marketing is handled basically by ensuring a presence on search engines, and by swapping hyperlinks with companies in related fields, so a link to each company is on the other's page. The process of arranging these pathways, though, is an additional drag on the development of the business, van Kempen says.
"It can take five to 10 days to get properly registered on a search-engine site."
In retrospect, given the initial technical difficulties, it was probably a blessing in disguise that few people were directed to the Datawrap site in the early days, he says. Not being able to handle a large crowd of potential customers would have had a major negative impact on the business.
Datawrap is adding a facility for customers to email the address of the site to a friend or colleague, and this should boost the catchment of possible customers further, van Kempen says.